Information at the WSJ

http://online.wsj.com/quotes/main.html?mod=2_0450&symbol=USBI&news-symbol=USBI

FDIC information on USBI

Click on http://www4.fdic.gov/IDASP/main.asp and for the FDIC certificate number enter 17077.

USBI shareholders vote down proposal

USBI shareholders vote down proposal
Sons of original director sought approval to seek merger
Wednesday, May 14, 2008
By KAIJA WILKINSON
Business Reporter

THOMASVILLE Despite impassioned arguments from sibling shareholders who sought approval for United Security Bancshares Inc. to aggressively seek a merger with a "well-managed" company and establish stricter guidelines for electing directors, both measures were voted down during the company's annual meeting Tuesday.

About 100 people, mostly shareholders, attended the meeting, held at Alabama Southern Community College.

Shareholders also approved the election of 12 directors, who will hold office until next year's annual meeting.

J. Patrick Davidson and William R. Davidson, both sons of James Samuel Davidson, an original director of USBI's predecessor bank, proposed the two failed measures.

The brothers cited problems with management of subsidiary Acceptance Loan Corp. as the driver of their proposals. In June 2007, the company reported that loan fraud had been uncovered at Acceptance that would result in at least $3.8 million in losses. The company said the fraud happened at two branches, which it declined to identify, and was related to fraudulent loans or fraudulent handling of repossessed automobiles.

At the time, USBI President R. Terry Phillips assured shareholders that the company was taking the matter very seriously and investigating it fully. USBI has since fired an undetermined number of people and named a new president of Acceptance.

Holders of about 3.4 million shares voted against the proposal to seek a merger, with holders of more than 695,000 shares, or 16.9 percent, voting for it, said secretary Larry Sellers after the votes were tallied. That measure had been proposed by William Davidson.

Meanwhile, holders of

3.8 million shares voted against the measure to implement a new system for nominating, evaluating and electing directors, with holders of 1.2 million voting in favor. J. Patrick Davidson had proposed that measure.

The only tense moment came when moderator Hardie Kimbrough, chairman of the board, would not permit William Davidson to respond to the company's response to Davidson's merger proposal. "No, sir," Kimbrough said when Davidson asked to lodge a brief response. Kimbrough moved quickly on to the next item.

In arguing in favor of the merger proposal, William Davidson said the stewards of USBI have failed shareholders by not recognizing fraud at the subsidiary sooner, which, in turn, had a drastic effect on net income. He said that earnings were less in 2007 than they were in 1997.

Reading from USBI's proxy statement, Kimbrough countered that seeking a merger would "create uncertainty regarding Bancshares' future which could undermine confidence in Bancshares and adversely affect Bancshares' relationships with its employees, its customers and the communities it serves."

On Friday, USBI reported that its first-quarter earnings fell from $3 million in first quarter 2007 to $1.9 million, or 31 cents per diluted share. The company blamed the decline on tough economic conditions, noting that like many other financial institutions, it has felt the effects of both bad loans and a slack demand for loans in some

markets.

USBI (Nasdaq: USBI) is a Delaware corporation that operates 19 banking offices in Clarke, Choctaw, Bibb, Shelby and Tuscaloosa counties through subsidiary First United Security Bank.

Shares closed Tuesday at $17.01, down $1.06 from Monday.

This is a video explanation of how the CDARS program works. Click where it says "see for yourself."

CDARS^® is the Certificate of Deposit Account Registry Service^®. And it's the most convenient way to enjoy full FDIC insurance on deposits of up to $50 million. With CDARS, you sign one agreement with a participating local bank or other financial institution of your choice, earn one interest rate, and receive one regular statement. It's that easy.

You've worked hard for your money. Now let it work hard for you. See for yourself.

This is a Wall Street Journal article giving ways to increase your FDIC coverage

Some Options for Protecting Accounts

By JILIAN MINCER
July 22, 2008; Page D6

NEW YORK -- Money sitting unprotected in the bank doesn't have to stay that way.

The Federal Deposit Insurance Corp. guarantees deposits of less than $100,000 but says that about 37% of domestic bank deposits aren't insured.

That's because the FDIC insures checking accounts, savings accounts and certificates of deposit, but not other financial products that are now being offered at banks -- including mutual funds, annuities and life insurance. The National Credit Union Administration provides the same protection to credit-union deposits.

Evans Vestal Ward for The Wall Street Journal

Amid troubles at banks like IndyMac, consumers want more protection.

This isn't cause for panic since the vast majority of financial institutions remain sound -- despite the recent failure of IndyMac Bank and the current troubles for several other big banks. Only 90 of the nation's approximately 8,500 banks and savings associations are currently on the FDIC's list of problem banks.

Still, those wishing to take no chances have several options for making sure their bank or credit-union accounts with balances greater than $100,000 are protected.

One simple move is to open a joint account, which is insured for up to $200,000. Additional accounts could protect even more assets, says Kathleen Thompson, senior vice president of compliance at the Credit Union National Association. Ms. Thompson says that the joint account she has with her husband is protected for up to $200,000, but that adding her son to the account would add another $100,000 for a total FDIC-coverage amount of $300,000.

An individual retirement account held at a bank is insured by the FDIC for up to $250,000. That applies only if the retirement account is invested in bank products and not stocks or mutual funds.

Another option is to open a revocable trust account, which is a deposit owned by one or more persons who intend to leave the money when they die to a named beneficiary. Each owner of a trust is entitled to FDIC insurance of up to $100,000 for each designated beneficiary. This means the account can be insured for up to $300,000 if there are three named beneficiaries. The catch is that only certain beneficiaries are covered, including a spouse, child, grandchild, parent or sibling. Nieces, nephews, friends and charities don't qualify.

"Consider multiple banks and don't rely on advice from banker tellers," says Deirdre Cummings, legislative director of the consumer advocate MASSPIRG. "Instead, you need to go to the FDIC."

Ms. Cummings says if you get incorrect information from a bank employee, you're stuck, so go directly to the source -- the FDIC Web site or its staff.

Consumers also need to be aware that if their banks merge, their deposits may climb higher than the protected $100,000.

Another alternative for consumers is to use a bank that participates in the Certificate of Deposit Account Registry Service, or CDARS, which enables consumers to get up to $50 million in FDIC insurance, says Phil Battey, a spokesman for Promontory Interfinancial Network, which sells CDARS.

Currently, about 2,150 institutions, or about a quarter of all banks, offer the service. The way it works is that a customer with more than $100,000 opens a CD at a participating bank. That institution keeps $100,000, and the remaining money is distributed electronically in amounts of up to $100,000 to other CDARS banks.

If someone has $1 million, for example, the money would be divided at 11 institutions, Mr. Battey says, because they like to keep the principle and accrued interest under $100,000.

Consumers get to see what banks will receive the other deposits, and could eliminate them from the list, he says. Consumers aren't charged for the service, but the banks pay 12 and one-half basis points, or 12 and one-half cents per $100 of coverage. A basis point is one-hundredth of a percentage point.

Mr. Battey says that clients include businesses, individuals and local governments. About 15% of them are local governments. Individuals account for the largest group with an average account size of $400,000 to $500,000.

"Most consumers have faith in their banks," says Ami Shaver, senior vice president of retail banking for United Bankshares Inc., which provides CDARS to its clients, but she added coverage "does ease their concerns."

URL for this article: http://online.wsj.com/article/SB121669223511572539.html

This is a CNBC segment explaining how CDARS works.

Video - CNBC.com: "CDARS: FDIC Insurance Up to $50M
Keeping your money safe, with Alan Blinder, vice chairman of Promontory Interfinancial Network, which runs CDARS."

Fed, Econ & You Whether the Fed will hold rates steady, with Robert Barbera, ITG; Liz Ann Sonders, Charles Schwab; CNBC's Rick Santelli & Steve Liesm

Video - CNBC.com: "Fed, Econ & You
Whether the Fed will hold rates steady, with Robert Barbera, ITG; Liz Ann Sonders, Charles Schwab; CNBC's Rick Santelli & Steve Liesman"